How do I know if it was mis-sold?

You may feel you were mis-sold your endowment mortgage if it was not suitable for your needs and circumstances.

However, you can only complain if the advice you received was incorrect or misleading. You don’t have grounds for complaint simply because the endowment has not performed as well as you would have hoped.

Grounds for complaint

It wasn’t fully explained to you that there could be a shortfall at the end of your mortgage term.

You were told that the endowment would definitely pay off the mortgage.

Your endowment policy and mortgage were set up to run into your retirement and your adviser didn’t ensure you would have the income to continue to make payments.

Your adviser recommended that you cash in an existing endowment and then sold you another.

Time limits

If you feel you have been mis-sold your policy and want to make a complaint there are strict time limits. Any complaint received by a firm after these time limits will usually lead to your complaint being rejected as being out of time, “this is known as ‘time-barring”.

Your complaint can be rejected if:

you receive a letter warning of a high risk of a shortfall; then receive a subsequent letter giving you at least six months’ notice of a ‘final date’ by which you have to complain

that ‘final date’ is at least three years after the date you received the first letter (and at least six years since you bought the policy)

However you may still complain after the ‘final date’ even if the firm rejects your original complaint as “being out of time”, to the Ombudsman if you think:

there are exceptional circumstances

the time bar was wrongly applied

the time bar was unfair

This should be done within six months of the firm sending you a ‘final response’ letter.

How to complain

Your first step should be to contact the business that sold you the endowment policy in writing. This may be a financial advisory firm, a mortgage lender or an endowment provider.

Try to pull together as much documentation as you can find and write down your grounds for complaint. If you can’t find the paperwork you can request it from your endowment company when you file your complaint.

What if the company no longer exists?

If the adviser or company that sold you the endowment no longer exists you should contact the Financial Services Compensation Schemeopens in new window, which may be able to pay compensation if the firm that sold you the endowment has ceased trading.

Right of appeal

After the firm has investigated your complaint it should give you a final decision within eight weeks, and this may include an offer of compensation.

If you are not happy with the response you receive, you are entitled to make a complaint to the Financial Ombudsman Service within six months, which will look independently at your case.

The Ombudsman is free and its contact centre staff will talk you through the process on 0800 023 4567 or 0300 123 9123. Lines are open Monday to Friday 8am to 8pm, Saturday – 9am to 1pm.

What the Ombudsman’s decision means

If the Ombudsman decides in your favour it may rule that the company pays compensation to you. This will not necessarily cover any mortgage shortfall you have. It is merely meant to return you to the position you would be in if you had received proper advice.

If you are happy with this decision you can accept it – in which case it is binding on both you and the company. This means you cannot decide to claim more compensation at a later date.

If you are not happy with the decision you can take your case to court, although it could be costly.

Cashing your policy in

You may be thinking about cashing in your endowment policy, particularly if you are awarded compensation.

However, an endowment is a long-term investment and by cashing it in early you may get a much smaller amount than if you had waited until maturity. In addition, endowments have life insurance built into them, which you may need.

Finally, remember that if you cash in your endowment you will be left with nothing in place to repay your mortgage at the end of the term, so you must plan for this. Speak to a financial adviser if you’re not sure what to do.